Nuwellis, Inc. Announces 35 Percent Increase in Revenue for Second Quarter 2021 Over Previous Year and Provides Company Update
10 August 2021 - 10:00PM
Nuwellis, Inc. (Nasdaq: NUWE) announced today its results for the
second quarter ended June 30, 2021, which included the following
highlights:
- Reported record quarterly revenue of $2.5 million, a 35 percent
increase compared to the prior year period
- Realized strong sequential growth across all customer markets
and recorded the sixth consecutive quarter with double-digit
revenue growth vs. prior year
- Welcomed George Montague, former CFO and COO of Smiths Medical,
as new CFO
- Welcomed Neil Ayotte, a 16-year veteran of Medtronic plc and
most recently EVP & General Counsel of Bluestem Group, as
Senior VP, General Counsel, Secretary and Chief Compliance
Officer
- Received Category III CPT code for the use of therapeutic
ultrafiltration, effective January 1, 2022
- Announced a three-year national purchase agreement with
Premier, Inc., one of the nation’s largest group purchasing
organizations
- Ended the quarter with $24.0 million in cash and no debt
“I am proud to report that Nuwellis achieved record quarterly
revenues for the second quarter 2021 with strong sequential growth
across all segments,” said Nestor Jaramillo, CEO of Nuwellis. “We
continue to execute and deliver on key strategic initiatives that
produce impressive double-digit growth rates seen over the past six
quarters. With the recent addition of a CPT code for treating
patients suffering from fluid overload, we believe we are
positioned to continue to accelerate the growth of our business in
the future.”
Second Quarter 2021 Financial ResultsRevenue
for the second quarter of 2021 was $2.5 million, an increase of 35%
compared to $1.9 million in the prior year period. Revenue growth
in the second quarter of 2021 was driven by both increased capital
equipment sales and strong utilization of disposables.
- Critical Care continued its strong momentum, driven by
increased utilization and unit placements at hospitals in the ICU
setting across the country. With COVID-related hospitalizations in
the U.S. having significantly declined since the vaccine rollout,
increased utilization among non-COVID critically ill patients
remains a durable growth trend.
- Pediatric revenue delivered strong double-digit sequential
revenue growth for the second straight quarter primarily due to
increased penetration and utilization at established accounts, in
addition to console sales to new customers.
- Heart Failure revenue increased sequentially due to more
normalized patient behavior and increased access to hospitals as
COVID-19 infection rates decline.
Gross margin was 60.2% for the second quarter 2021, compared to
64.4% in the prior year period. The decline in gross margins was
primarily due to a production ramp last year to support the launch
of the Aquadex SmartFlow system and to meet expected future demand.
Gross margins should benefit in future periods as production
volumes increase and fixed overhead get allocated over a larger
base.
Selling, general and administrative (“SG&A”) expenses for
the second quarter of 2021 were $5.1 million, an increase of 20%
compared to the prior year period. The increase in SG&A was
primarily due to our continued investment in sales and marketing
activities, along with nonrecurring leadership transition costs.
Research and development (“R&D”) expenses in the second quarter
of 2021 were $1.2 million, an increase of 33% compared to the prior
year period. The increase in R&D expenses was driven primarily
by investments in new products and clinical support of our
pediatric registry.
The net loss for the second quarter of 2021 was $4.7 million,
compared to a net loss of $3.9 million in the prior year
period.
Cash and cash equivalents were approximately $24.0 million with
no debt as of June 30, 2021. During the second quarter of 2021, the
Company used $3.9 million of cash from operations.
2021 Full-Year OutlookThe Company expects
quarterly revenue to continue increasing sequentially for the
remainder of 2021 as it continues to build its commercial presence
and seeks to increase utilization of Aquadex therapy. This outlook
includes several assumptions, including no significant change in
utilization or procedure volumes associated with COVID-19
resurgences.
Webcast and Conference Call InformationThe
Company will host a conference call and webcast at 9:00 AM ET today
to discuss its financial results and provide an update on the
Company’s performance. To access the live webcast, please visit
http://ir.nuwellis.com. Alternatively, you may access the live
conference call by dialing (877) 303-9826 (U.S.) or (224) 357-2194
(international) and using conference ID: 1396749. An audio archive
of the webcast will be available following the call at
http://ir.nuwellis.com.
About NuwellisNuwellis, Inc. (Nasdaq:
NUWE) is a medical device company dedicated to changing the lives
of patients suffering from fluid overload through science,
collaboration, and innovation. The Company is focused on
developing, manufacturing and commercializing the Aquadex
SmartFlow® system for ultrafiltration therapy. Nuwellis is
headquartered in Minneapolis, Minn., with a wholly-owned subsidiary
in Ireland.
About the Aquadex SmartFlow System The Aquadex
SmartFlow system delivers clinically proven therapy using a simple,
flexible and smart method of removing excess fluid from patients
suffering from hypervolemia (fluid overload). The Aquadex SmartFlow
system is indicated for temporary (up to 8 hours) or extended
(longer than 8 hours in patients who require hospitalization) use
in adult and pediatric patients weighing 20 kg or more whose fluid
overload is unresponsive to medical management, including
diuretics. All treatments must be administered by a health care
provider, within an outpatient or inpatient clinical setting, under
physician prescription, both having received training in
extracorporeal therapies.
Forward-Looking StatementsCertain statements in
this release are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including
without limitation, statements regarding the new market
opportunities and anticipated growth in 2021 and beyond.
Forward-looking statements are predictions, projections and other
statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks
and uncertainties. Many factors could cause actual future events to
differ materially from the forward-looking statements in this
release, including, without limitation, those risk associated with
our ability to execute on our commercialization strategy, the
impact of the COVID-19 pandemic, the possibility that we may be
unable to raise sufficient funds necessary for our anticipated
operations, our post-market clinical data collection activities,
benefits of our products to patients, our expectations with respect
to product development and commercialization efforts, our ability
to increase market and physician acceptance of our products,
potentially competitive product offerings, intellectual property
protection, our ability to integrate acquired businesses, our
expectations regarding anticipated synergies with and benefits from
acquired businesses, and other risks and uncertainties described in
our filings with the SEC. Forward-looking statements speak
only as of the date when made. Nuwellis does not assume any
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
FINANCIAL STATEMENTS
NUWELLIS, INC. AND
SUBSIDIARIESCondensed Consolidated Statements of
Operations and Comprehensive Loss (unaudited, in
thousands, except per share amounts)
|
|
Three months endedJune 30, |
Six months endedJune 30, |
|
|
2021 |
|
2020 |
|
|
2021 |
2020 |
|
Net sales |
$ |
2,508 |
|
$ |
1,863 |
|
$ |
4,426 |
|
$ |
3,493 |
|
Cost of goods sold |
|
997 |
|
|
664 |
|
|
1,949 |
|
|
1,460 |
|
Gross profit |
|
1,511 |
|
|
1,199 |
|
|
2,477 |
|
|
2,033 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
5,063 |
|
|
4,234 |
|
|
10,300 |
|
|
8,770 |
|
Research and development |
|
1,174 |
|
|
885 |
|
|
2,121 |
|
|
1,749 |
|
Total operating expenses |
|
6,237 |
|
|
5,119 |
|
|
12,421 |
|
|
10,519 |
|
Loss from operations |
|
(4,726 |
) |
|
(3,920 |
) |
|
(9,944 |
) |
|
(8,486 |
) |
Other income (expense), net |
|
(2 |
) |
|
— |
|
|
(3 |
) |
|
— |
|
Loss before income taxes |
|
(4,728 |
) |
|
(3,920 |
) |
|
(9,947 |
) |
|
(8,486 |
) |
Income tax expense |
|
(3 |
) |
|
(2 |
) |
|
(5 |
) |
|
(4 |
) |
Net loss |
$ |
(4,731 |
) |
$ |
(3,922 |
) |
$ |
(9,952 |
) |
$ |
(8,490 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
$ |
(0.72 |
) |
$ |
(3.10 |
) |
$ |
(2.04 |
) |
$ |
(11.31 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted |
|
6,532 |
|
|
1,264 |
|
|
4,887 |
|
|
906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
$ |
— |
|
$ |
(2 |
) |
$ |
(3 |
) |
$ |
(5 |
) |
Total comprehensive
loss |
$ |
(4,731 |
) |
$ |
(3,924 |
) |
$ |
(9,955 |
) |
$ |
(8,495 |
) |
NUWELLIS, INC. AND
SUBSIDIARIESCondensed Consolidated Balance
Sheets(in thousands, except share and per share
amounts)
|
|
June 30,2021 |
|
|
December 31, 2020 |
|
ASSETS |
|
(unaudited) |
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash equivalents
|
$ |
23,978 |
|
|
$ |
14,437 |
|
|
Accounts receivable |
|
1,177 |
|
|
|
905 |
|
|
Inventories |
|
2,656 |
|
|
|
2,957 |
|
|
Other current assets |
|
413 |
|
|
|
237 |
|
|
Total current
assets |
|
28,224 |
|
|
|
18,536 |
|
|
Property, plant and equipment, net |
|
1,260 |
|
|
|
1,200 |
|
|
Operating lease right-of-use asset |
|
156 |
|
|
|
255 |
|
|
Other assets |
|
— |
|
|
|
21 |
|
|
TOTAL
ASSETS |
$ |
29,640 |
|
|
$ |
20,012 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts payable |
$ |
1,787 |
|
|
$ |
1,097 |
|
|
Accrued compensation |
|
1,577 |
|
|
|
2,192 |
|
|
Current portion of operating lease liability |
|
160 |
|
|
|
206 |
|
|
Current portion of finance lease liability |
|
25 |
|
|
|
24 |
|
|
Other current liabilities |
|
54 |
|
|
|
66 |
|
|
Total current
liabilities |
|
3,603 |
|
|
|
3,585 |
|
|
Operating lease liability |
|
— |
|
|
|
55 |
|
|
Finance lease liability |
|
41 |
|
|
|
54 |
|
|
Total
liabilities |
|
3,644 |
|
|
|
3,694 |
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
Series A junior participating
preferred stock as of June 30, 2021 and December 31, 2020, par
value $0.0001 per share; authorized 30,000 shares, none
outstanding |
|
— |
|
|
|
— |
|
|
Series F convertible preferred
stock as of both June 30, 2021 and December 31, 2020, par value
$0.0001 per share; authorized 127 shares, issued and outstanding
127 shares |
|
— |
|
|
|
— |
|
|
Preferred stock as of both
June 30, 2021 and December 31, 2020, par value $0.0001 per share;
authorized 39,969,873 shares, none outstanding |
|
— |
|
|
|
— |
|
|
Common stock as of June 30,
2021 and December 31, 2020, par value$0.0001 per share; authorized
100,000,000 shares, issued and outstanding 6,532,018 and 2,736,060,
respectively |
|
— |
|
|
|
— |
|
|
Additional paid-in
capital |
|
269,296 |
|
|
|
249,663 |
|
|
Accumulated other
comprehensive loss: |
|
|
|
|
|
|
Foreign currency translation adjustment |
|
(10 |
) |
|
|
(7 |
) |
|
Accumulated deficit |
|
(243,290 |
) |
|
|
(233,338 |
) |
|
Total stockholders’
equity |
|
25,996 |
|
|
|
16,318 |
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
29,640 |
|
|
$ |
20,012 |
|
|
NUWELLIS, INC. AND
SUBSIDIARIESCondensed Consolidated Statements of
Cash Flows(unaudited, in thousands)
|
|
Six months endedJune 30, |
|
|
2021 |
|
|
2020 |
|
Operating Activities: |
|
|
|
|
|
|
Net loss |
$ |
(9,952 |
) |
$ |
(8,490 |
) |
Adjustments to reconcile net loss
to cash flows used in operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
256 |
|
|
151 |
|
Stock-based compensation
expense, net |
|
736 |
|
|
727 |
|
Loss on disposal of property
and equipment |
|
— |
|
|
46 |
|
Changes in operating assets and
liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
(272 |
) |
|
(179 |
) |
Inventory |
|
122 |
|
|
(1,104 |
) |
Other current assets |
|
(176 |
) |
|
20 |
|
Other assets and liabilities |
|
9 |
|
|
112 |
|
Accounts payable and accrued expenses |
|
75 |
|
|
(43 |
) |
Net cash used in
operating activities |
|
(9,202 |
) |
|
(8,760 |
) |
|
|
|
|
|
|
|
Investing
Activities: |
|
|
|
|
|
|
Purchases of property and equipment |
|
(137 |
) |
|
(69 |
) |
Net cash used in
investing activities |
|
(137 |
) |
|
(69 |
) |
|
|
|
|
|
|
|
Financing
Activities: |
|
|
|
|
|
|
Proceeds
from public stock offerings, net |
|
18,896 |
|
|
13,040 |
|
Proceeds
from warrant exercises |
|
1 |
|
|
2,340 |
|
Payments
on finance lease liability |
|
(14 |
) |
|
(4 |
) |
Net cash provided by
financing activities |
|
18,883 |
|
|
15,376 |
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash |
|
(3 |
) |
|
(5 |
) |
Net increase in cash and cash
equivalents |
|
9,541 |
|
|
6,542 |
|
Cash and cash equivalents -
beginning of period |
|
14,437 |
|
|
1,279 |
|
Cash and cash equivalents
- end of period |
$ |
23,978 |
|
$ |
7,821 |
|
|
|
|
|
|
|
|
Supplemental cash flow
information |
|
|
|
|
|
|
Inventory transferred to property, plant and equipment |
$ |
179 |
|
$ |
112 |
|
Equipment acquired through finance lease liability |
$ |
— |
|
$ |
67 |
|
CONTACTS:
INVESTORS: George MontagueChief Financial
Officer, Nuwellis, Inc. ir@nuwellis.com
Matt BacsoGilmartin Group
Matt.Bacso@gilmartinir.com MEDIA:Jessica
StebingHealth+Commercejstebing@healthandcommerce.com
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